United States President Donald Trump announced in December 2019 that a trade deal with China would require approximately three phases. On Jan. 15 President Trump and Chinese Vice Premier Liu He signed “phase one” of the deal.[1]
According to reports in The Wall Street Journal[2] and tweets from the President Trump, the deal includes the U.S. agreeing to halt tariffs going forward and a reduction of some current tariffs from 15% to 7.5%. China will respond with major purchases of U.S. agricultural products, ostensibly totaling USD 40-50 billion. U.S. tariffs of 25% would remain on roughly USD 250 billion in Chinese goods, including machinery, electronics and furniture. In exchange, officials in Washington said China agreed to increase American agricultural purchases by USD 32 billion over previous levels over the next two years.
That would increase total farm-product purchases to USD 40 billion a year, with China working to raise it to USD 50 billion a year, U.S. Trade Representative Robert Lighthizer told reporters at the White House. The farm purchases would be part of total additional exports of USD 200 billion over two years, said Lighthizer, who didn’t provide specifics.
“I say affectionately that the farmers are going to have to go out and buy much larger tractors because it means a lot of business, a tremendous amount of business,” President Trump said.[3]